The NYMEX December natural gas futures contract fell 1.2 cents Tuesday, settling at $3.555/MMBtu, as S&P Global Platts Analytics forecast a day-on-day output decline of 2 Bcf and November weather forecasts showing winter is imminent.
The front-month contract traded Tuesday between $3.514/MMBtu and $3.581/MMBtu.
Following strong increases in NYMEX futures Monday, neutral changes were observed in the remaining winter NYMEX strip. For the average of December through March futures contracts, the winter strip traded at $3.426/MMBtu.
Platts Analytics data shows that dry production slid 1.8 Bcf/d Tuesday, with another 200 MMcf/d in decreased imports from Canada. Total US demand remained unchanged Tuesday at 71.4 Bcf/d.
Total aggregate LNG feedgas volumes have come down to 3.4 Bcf/d Tuesday from above 4 Bcf/d, but Platts Analytics data shows feedgas deliveries to Cheniere's Corpus Christi LNG first train have risen to a new high of 98 MMcf/d for Tuesday's gas day.
National Weather Service forecasts for the next eight to 14 days show below-average temperatures for most of the eastern US, stretching from the Rocky Mountains to the Atlantic Coast.
"Prices may start to turn more neutral," said John Woods, president of JJ Woods Associates. "We're at the high price now, we may need to pull back. There were a lot of shorts in the market and a lot of them got caught yesterday."
Platts Analytics forecasts demand to rise tomorrow to 76.1 Bcf. Over the next seven days, demand is forecast to average 82.4 Bcf/d, rising further to 82.9 Bcf/d over the next eight to 14 days.
Residential/commercial demand is where sector demand growth will come from as colder weather arrives -- over the next seven days residential/demand is expected to jump nearly 10 Bcf/d to 33.5 Bcf/d compared with Tuesday's estimate, Platts Analytics data shows.
The NYMEX settlement price is considered preliminary and subject to change until a final settlement price is posted at 7 pm EDT (0000 GMT Wednesday).
